Crypto trading became one of the hottest topics not only for investors but also in popular culture, thanks to celebrities like Elon Musk.
Now, predicting where crypto prices might head to in the long term can be challenging. What we can do instead is look at 3 reasons why experts believe cryptos have had a breakthrough year – and why you might want to consider trading them.
LOW COMMISSION TRADING FOR POPULAR CRYPTOS
1. Unprecedented institutional interest from banking giants pushed crypto into the mainstream.
As Bitcoin and altcoins continued to grow, traditional financial institutions started looking for new ways to provide their customers with access to this lucrative market. In the spring of 2021, Goldman Sachs and Morgan Stanley became the first famous names to make crypto funds investing accessible for high-level clients, marking a significant step in the progress of banks toward full adoption of cryptocurrency. Furthermore, Morgan Stanley acquired over 1 million shares in the popular Grayscale Bitcoin Trust, attempting to expose its clients to crypto.
JPMorgan jumped on the same boat by creating Liink, a proprietary blockchain payments platform for financial institutions and corporate users. Also, JPMorgan was the first major bank to provide all its clients with access to Bitcoin and other cryptocurrencies, paving the way for crypto going mainstream.
2. Inflationary pressure boosted crypto demand.
The COVID-19 pandemic forced governments around the world to pour huge amounts of money into economies, attempting to prevent their collapse. Many central banks started printing more money, pushing inflation higher and lowering people’s purchasing power.
Facing this threat, investors moved to cryptos such as Bitcoin, as they consider it a store of value. The maximum number of bitcoins is currently set at 21 million, and there are already approximately 18.8 million in circulation*. Plus, the supply of new coins is constantly slowing down because the blockchain halves every four years. Scarcity has always been a major driver for higher demand.
*As of September 30, 2021.
LOW COMMISSION TRADING FOR POPULAR CRYPTOS
3. Payment giant PayPal lifted crypto popularity to new heights.
In late November 2020, PayPal announced a new service allowing US users to buy, hold and sell crypto. Fast forward to March 2021, PayPal took things one step further by enabling North American customers to pay for their online shopping with the world’s most popular digital coins. Through PayPal’s “Checkout with Crypto” feature, US residents were handed a fast and accessible solution to instantly convert their Bitcoin, Ethereum, Litecoin, or Bitcoin Cash to US Dollars (with no additional transaction fees) that PayPal can then use to complete each transaction.
On August 23, PayPal revealed that it would allow UK customers to buy and sell four cryptocurrencies. Following the news, Bitcoin price rose to a three-month high.
PayPal may not be the first payment app to support cryptocurrencies (Square introduced a similar app back in 2018). However, the launch of cryptocurrency as a form of payment turned PayPal into both a major digital wallet and a cryptocurrency exchange. Plus, PayPal has more than 400 million users, compared to 30 million for Square.
The crypto market is currently growing at its fastest pace since April. Digital currencies, from all-time favorites to rising stars, are quickly moving towards record highs.
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